Bollinger barbeque

This is a method have been backtested and paper traded from January to June this year with a result of 3270 pips profit.

I got inspiration from two of my favorite traders from this forum, Kharvell and Steviet. Took their best parts and added my own style

It is adjusted to be traded at 1H time frame and GBP/CHF, but I'm sure it will work with many pairs with a little tweaking.

What do you need?

EMA 250
Bollinger bands period 20 and deviations 2.0
Bollinger bands period 20 and deviations 2.5

What is the EMA for?
That is our "trend" indicator.
If price is below we are ONLY interested to sell.
If price is above we are ONLY interested to buy.

How about the Bollinger bands?
We know that price likes to stay between the bands most of the time, and some times price go wild and explodes in either direction.
But most of the time price respects the BB as support/resistance.

There are two kinds of trades from the BB.

* Based from the outer bands

* Based from the middle band (which often leads to those wild explosions)

Stop loss
I have choosen a sl at 60 pips

How to trade
Lets look have a look at this pic:

http://www.freeforexguides.com/images/gbpchf.gif

The price is above the EMA so we are only looking for long entries.

If you look at number 1. That is a trade based on the outer band. The price has been down touching the outer bands, but the trade is excecuted when the first green candle is closed. The trade could even had been excecuted at any of the two little candles before.
But an important rule is: only enter long on green candles and short on red candles.

Number 2 is our take profit level. Normally when the trades are based on the outer bands, I take 50% of at the middle band and the rest 50% at the opposite band. But at this trade there was not room to take profit at the middle.

If you look at the candles right after number 2, they are all covering the area between the outer band and the middle. The area between the bands are also quite thin so we DO NOT trade there. That's usually and indication of a big move. As you can see we get a explosion downwards.

The price is still above the EMA so we are still ONLY looking for LONG entries. After a move like that with the angle of the BB we want to see two green candles, before we go long.

We get our two green candles at number 3, so we enter long with first 50% take profit at the middle band and the rest 50% at the opposit outer bands.

Our TP's are hit at 4 and 5. When the first TP are hit at number 4, SL is moved to atleast break even. If you do not want to risk your winnings it could be moved closer to the middle bands at round numbers or support/resistance.

At number 6 we see that price has been below the middle band and a little green candle is shown. We enter long with 50% take profit at outer band. The rest 50% we are going to use a trailing stop.

After number 6 the price goes below the middle band but never actually touches the lower bands. (Thats why we have 60 pip SL) When the price breaks the middle band again from below, that often leads to a BIG move upwards. Our first TP is hit at number 7.

When the price decides to rise, we gently move our SL 10-15 pips below the low of the previous bar. That some times leads to massive +200 pips profits .

Please, feel free to comment.

Yes I will have mine with fries to go please
Could not resist.As far as your system it looks
very promising. I've done a lot of work with BB bands and
this makes sense. Have you tryed an EA on it because
the rules here seem black and white.

This is probably a really silly question but how do you put a BB with 2.5 deviations on MT4?

I can't seem to put anything other than an integer for the deviation input

Look in your Customer indicators folder:

Ha ha, funny! I have considered to make an EA, but I do not have the time at the moment. Thanks for the comment.


Possible sell at GBP/CHF now. A bit late but I think it should work. Break through EMA and red candles.

It turned out to be a quick +20 pips profit, with the rest 50% at BE.

Hey Grillbritt, great method!

One quick question if you don't mind.

Could you please explain further as to when you do or don't use the mid line as an entry point?

thx,
todd

Great Thread. I'm currently learning the C4 Scalping method for shorterm trading but like your method. I'm learning DanUk's method also for hourly chart trading. I'm going to combine your method with that and see what I accomplish but will follow your thread also.

It seems pretty simple and effective. Also I like how you took the +20 pips. Some would say that trading off an hourly chart, +20 is not worth the risk you accept but I feel like a win is a win.

The midline entry are often used when my first order from the bottom/top bands are closed. That often happens when I first enter at the top/bottom, take 50% of at the middle line and move my SL to break even. But sometimes price decides it won't go to the lower/upper band.

20 pips is always 20 pips, could be considered a low reward/risk ratio but the win% is over 70% and they often are alot more than 60 pips. I entered the trade because the price had been over the middle line sometimes, but as you can see it closed several times below the middle line AND EMA. So my initial entry would be at the big white bar closed 2 bars before the one currently opened at the picture.

Please demo trade this before using on any real account.

A little trade I took last night. Entered at the little red bar piercing through middle line. First TP already hit +40 pips, moving my SL above the big RED (white) bar.

The remaining 50% got stopped out at +60 pips.

very nice!!
did you test also 30min? it looks also promising
bj

My compliments. You have explained your method very well. I will follow this thread with interest.

There is just one thing that's not so clear to me: Why are you using two sets of BB's?

Thank you! I use two sets of BB because price sometimes respect the 2.0 and sometimes 2.5. The 2.0 also works better as a filter to spot those bad trading areas where the candles covering the space between the outer 2.0 band and the middle band.

I missed this trade but it's looking really good.

can u post your templates pls?

Sure...

A short opportunity that I took, TP1 already hit and waiting for middle line break.

http://www.freeforexguides.com/images/gbpchf5.gif